Tata Motors hits lowest level since February 2016 on weak Q4 results

Tata Motors plunged 8% to Rs 286, its lowest level since February 2, 2016 on the market in early morning trade, after the Tata Group Company reported a consolidated net profit of Rs 21.75 billion against an average analysts estimates of Rs 42.30 billion for the March quarter (Q4FY18). The company’s profits for the March quarter nearly halved from Rs 43.36 billion in year ago quarter, due to higher expenses and a one-time impairment charge.

The consolidated income from operations at the firm rose to Rs 912.79 billion over Rs 787.46 billion in the year-ago quarter. The earnings are not strictly comparable due to the implementation of goods and services tax from July, after which the revenue from operations was reported net of GST.

Management expects a strong all-round performance in FY19, with improvement in volume and profitability. JLR EBIT margin target stands at 4-7% (vs 3.8% in FY18) between FY19-21, led by better scale, cost reduction efforts, ramp up of low cost Slovakia plant and reduction in forex losses. In comparison, Standalone EBIT margin target stands at 3-5% (vs 0.5% in FY18), led by better scale and cost reduction efforts.